Overview

Abuse of dominance is one of the three core pillars of China’s Anti-Monopoly Law (AML), alongside monopoly agreements and merger control. Under AML Article 22 (formerly Article 17 prior to the 2022 amendments), it is prohibited for “undertakings with a dominant market position” to abuse that position by engaging in specified exclusionary or exploitative conduct. The prohibition applies to all undertakings operating in China — both domestic and foreign — and carries penalties of up to 10% of annual turnover for the most serious violations.

Since 2020, SAMR and its predecessor agencies have intensified enforcement against abuse of dominance, targeting both traditional industrial sectors (pharmaceuticals, utilities, raw materials) and the digital economy (e-commerce platforms, internet services, data markets). The 2022 AML amendments introduced several important changes to the abuse of dominance framework, including explicit provision for abuse of dominance in the platform economy and increased penalties for repeat offenders.

This FAQ provides a comprehensive analysis of what constitutes abuse of dominance under China’s AML, the legal tests applied by SAMR and the courts, and what foreign companies with significant market positions in China need to know.

How is “dominant market position” defined under the AML?

Article 22 of the AML defines “dominant market position” as a market position where an undertaking is able to control the price, quantity, or other trading conditions of products or services in the relevant market, or to hinder or affect the entry of other undertakings into the relevant market. This definition focuses on market power — the ability to act independently of competitive constraints.

The AML lists several factors to be considered in determining dominance (Article 23):

• Market share in the relevant market and the competitive conditions of that market
• The ability to control the sales market or procurement market
• The financial strength and technical capabilities of the undertaking
• The degree of dependence of other undertakings on the dominant undertaking
• The difficulty for other undertakings to enter the relevant market (barriers to entry)
• Other relevant factors

Importantly, the AML creates a rebuttable presumption of dominance (Article 24): an undertaking with a market share of 50% or more in the relevant market is presumed to have a dominant position. For two undertakings whose combined market share is 66.67% or more, or three undertakings with a combined share of 75% or more, a collective dominance presumption may apply. These presumptions can be rebutted by evidence that the undertaking lacks the ability to control market conditions or that effective competition exists.

What is the role of relevant market definition?

Defining the relevant market is the critical first step in any abuse of dominance analysis. SAMR applies the standard framework of product market (all products or services that are substitutable for each other based on characteristics, price, and intended use) and geographic market (the geographic area in which competitive conditions are sufficiently homogeneous).

In the digital economy context, SAMR’s 2024 Guidelines on Abuse of Dominance in the Platform Economy introduced market definition principles tailored to platform markets, including multi-sided markets, zero-price markets, and ecosystem competition. Key considerations include:

• Whether the platform operates in a single-sided or multi-sided market
• The role of network effects and data advantages as competitive factors
• Whether “free” services constitute a separate relevant market
• The relevance of cross-platform network effects and user multi-homing

In the landmark 2021 Alibaba case, SAMR defined the relevant market as “the online retail platform service market in China” — a single-sided market approach that treated the platform’s service to merchants as the relevant product, separate from the service to consumers. The case set the analytical framework for subsequent platform economy enforcement, including the 2023 Tencent music licensing case and the 2024 Meituan exclusive dealing case.

What types of conduct constitute abuse of dominance?

AML Article 22 enumerates seven categories of abusive conduct, which can be grouped into two broad categories: exclusionary abuse (conduct that excludes competitors) and exploitative abuse (conduct that exploits customers or suppliers).

1. Predatory Pricing (Article 22, Item 1)

Selling products or services at below cost without legitimate justification, with the effect of eliminating competitors. SAMR analyzes (a) whether prices are below average variable cost (AVC) or average avoidable cost (AAC), (b) whether there is a legitimate business justification (e.g., perishable goods clearance, promotional launch for new products), and (c) whether the conduct is capable of foreclosing competition. In digital markets, SAMR has recognized that below-cost pricing may be predatory even without direct evidence of recoupment potential.

2. Refusal to Deal (Article 22, Item 2)

Refusing to trade with a trading counterpart without legitimate justification. The essential facilities doctrine — developed in Chinese case law through the 2014 Huawei v. InterDigital case and the 2021 China Audio-Video Standards case — applies where access to an input is indispensable for competition in a downstream market and duplication of the input is not reasonably feasible. SAMR’s 2024 Platform Guidelines explicitly recognize data as a potential essential facility.

3. Exclusive Dealing (Article 22, Item 3)

Requiring trading counterparties to deal exclusively with the dominant undertaking, without legitimate justification. This is the most frequently enforced abuse category. The 2021 Alibaba case (RMB 18.2 billion fine) established that “choosing one from two” (二选一) arrangements — requiring merchants to choose between platforms — constituted abuse of dominance. The 2024 Meituan case extended this analysis to exclusive delivery agreements.

4. Tying and Bundling (Article 22, Item 4)

Tying the sale of one product or service to another without legitimate justification, or imposing unreasonable trading conditions. SAMR examines (a) whether the tied products are distinct products for which independent demand exists, (b) whether the undertaking has coerced or induced customers to accept the tie, and (c) whether the tie has foreclosure effects. The 2023 Microsoft Teams bundling investigation (ultimately settled with behavioral commitments) highlighted SAMR’s willingness to pursue bundling cases against technology companies.

5. Discriminatory Treatment (Article 22, Item 5)

Applying differential transaction conditions to equivalent trading counterparties without legitimate justification. This covers price discrimination, discriminatory access to essential inputs, and discriminatory terms and conditions. SAMR examines whether the counterparties are in a “comparable position” and whether the differential treatment places certain counterparties at a competitive disadvantage.

6. Unfair Pricing (Article 22, Item 6)

Selling products at unfairly high prices or purchasing at unfairly low prices. This is the primary “exploitative” abuse category. SAMR applies a “price-cost margin” test and a “comparative market” test, comparing the dominant undertaking’s prices with: (a) historical prices for the same product, (b) prices in comparable geographic markets, and (c) prices charged by comparable undertakings. The pharmaceutical sector has been a major focus — SAMR has imposed fines exceeding RMB 1 billion collectively for excessive drug pricing since 2021.

7. Other Abuses (Article 22, Item 7 — Catch-All)

The AML includes a catch-all provision covering “other conduct recognized as abuse of dominance by SAMR.” This gives the enforcer flexibility to address novel forms of abusive conduct not specifically enumerated. SAMR has used this provision to address: (a) self-preferencing in search rankings and platform algorithms (2024 JD.com case), (b) leveraging dominance in one market to gain advantage in an adjacent market (2025 Tencent WeChat ecosystem case), and (c) using data advantages to impede competition (2025 ByteDance data access case).

What defenses are available to a dominant firm?

An undertaking suspected of abuse of dominance may raise the following defenses (generally categorized as “legitimate business justifications” under SAMR’s enforcement guidelines):

• Efficiency justification: The conduct produces efficiencies that outweigh any anticompetitive effects (e.g., economies of scale, cost savings, technical interoperability).
• Pro-competitive justification: The conduct is necessary to compete effectively against other strong competitors (the “meeting competition” defense).
• Consumer benefit: The conduct results in lower prices, higher quality, or greater choice for consumers.
• Objective necessity: The conduct is objectively necessary for the dominant undertaking to operate its business (e.g., safety and quality standards, technical compatibility requirements).

However, Chinese enforcement practice has been skeptical of efficiency defenses — particularly in digital economy cases. In the Alibaba and Meituan cases, the undertakings’ efficiency arguments were largely rejected. The burden of proof for establishing a legitimate business justification falls on the dominant undertaking.

Recent enforcement trends and landmark cases (2024–2026)

The enforcement landscape for abuse of dominance has evolved rapidly:

• 2024: Meituan exclusive dealing case. RMB 3.4 billion fine for requiring restaurants to enter exclusive delivery arrangements on its food delivery platform. The case established principles around multi-homing restrictions and the definition of “exclusive dealing” in the platform economy.
• 2025: Pharmaceutical sector campaign. SAMR launched a coordinated nationwide campaign against excessive drug pricing, targeting 15 pharmaceutical companies for abuse of dominance in the supply of critical medicines. Total fines exceeded RMB 800 million.
• 2025: JD.com self-preferencing case. SAMR found JD.com had abused its dominance in the e-commerce logistics services market by prioritizing its own logistics services in search rankings. The case was resolved with behavioral commitments and a RMB 500 million fine.
• 2025: Tencent WeChat ecosystem case. SAMR found that Tencent had abused its dominance in the social networking market to impede third-party services from integrating with WeChat. The case resulted in RMB 2.5 billion in penalties and commitments to open WeChat’s ecosystem to third-party developers.
• 2026 (first half): Data access cases. SAMR has opened investigations into data hoarding practices by dominant digital platforms, examining whether refusal to grant data access to smaller competitors constitutes abuse. Two investigations — targeting a major search engine and a major social commerce platform — are ongoing.

Compliance strategies for dominant firms in China

Foreign companies that hold a dominant position in any relevant market in China should implement the following compliance measures:

1. Market share monitoring: Regularly assess market share in all relevant product and geographic markets. A share approaching 50% triggers careful scrutiny — at 50% the dominance presumption applies.
2. Conduct review: Audit pricing practices, trading terms, distribution arrangements, and any form of exclusive dealing, tying, or discriminatory treatment for potential abuse exposure.
3. Digital platform compliance: Platform-based businesses require specialized compliance programs addressing self-preferencing, data access, algorithm transparency, and multi-homing restrictions.
4. Self-assessment framework: Develop a documented self-assessment framework based on SAMR’s 2024 Abuse of Dominance Guidelines, with legal counsel review of any conduct that could raise concerns.
5. Leniency and settlement: The AML’s settlement mechanism (Article 53, introduced in 2022) allows dominant firms to offer commitments to address SAMR’s concerns. Early engagement with SAMR can lead to more favorable outcomes than adversarial proceedings.

Conclusion

Abuse of dominance enforcement under China’s AML has entered a new era of intensity and sophistication. The 2022 AML amendments, combined with sector-specific guidelines for the digital economy, have given SAMR a robust legal framework to pursue both traditional industrial monopolists and dominant digital platforms. For foreign companies with significant market positions in China — whether in manufacturing, technology, pharmaceuticals, or services — the risk of abuse of dominance investigation is real and growing. Proactive compliance, careful market definition analysis, and engagement with specialized Chinese antitrust counsel are essential components of risk management for dominant firms operating in the Chinese market.